Chinese car manufacturer, Geely, has been named as the 'preferred bidder' to take control of Volvo.
Geely, which doesn't sell cars in Europe, looks set to become the new owner of Sweden's biggest car maker - in a move that would dramatically expand the scale of the Chinese maker's operations.
Volvo's current owner, Ford, wants to offload the company to protect its core American operations. It has already sold its other European brands Aston Martin, Jaguar and Land Rover.
Geely is one of China's largest manufacturers, but before the deal can be signed, an agreement will have to be reached to cover Ford's intellectual property in Volvo's products.
Not a done deal
Previous attempts by manufacturers to sell operations to Chinese manufacturers have failed due to concerns that their technology will be copied.
Lewis Booth, Ford's chief financial officer, said: 'Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand.
'However, we have no specific timeline to conclude the discussions.'
If the sale does go through, Volvo owners and buyers are unlikely to notice any immediate changes, and the company has assured British buyers that all existing warranties will continue to be honoured.